By on February 8, 2021

Tesla has invested $1.5 billion in Bitcoin and will soon be accepting cryptocurrency as a valid form of payment. Unsurprisingly, the digital token’s valuation surged as news broke, sending it past its all-time high of $44,000 and making a lot of investors incredibly happy.

CEO Elon Musk has boosted various cryptocurrencies in the past by doing little more than saying their name. For example, Dogecoin was co-founded by IBM and Adobe software engineers as the satirical alternative (hence the name) to other forms of digital currency. But it became the eighth-most valuable cryptocurrency after Musk started tweeting about it at the start of February.

While that could have been a trial to see if moving on Bitcoin would have a similar effect, it’s hard to imagine Tesla pouring its finances into the mix could have had any other effect. The automaker issued its annual report on Monday, noting that it had purchased $1.5 billion of the cryptocurrency as part of an earlier initiative to buy up alternative assets like digital coins and gold bullion.

As for how you’ll be paying for your next Tesla, details of the Bitcoin exchange haven’t been worked out as of yet. Its filing with the Securities and Exchange Commission only stipulates that the company hopes “to begin accepting bitcoin as a form of payment for our products in the near future … initially on a limited basis, which we may or may not liquidate upon receipt.”

Musk himself has suggested government-backed currencies are overhyped and that Bitcoin seems a viable alternative. He has also suggested that the digital coin is on the cusp of being endorsed by “conventional finance people.” This has been echoed other crypto investors, though they have plenty to gain by convincing others to buy in. But Tesla’s filing did not fail to exercise some amount of caution and acknowledged that the “long-term adoption [of cryptocurrencies] by investors, consumers and businesses is unpredictable” and open to digital attacks. We imagine that’s just in there for cover, as there are few forms of investing that are risk-free.

[Image: JL IMAGES/Shutterstock]

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18 Comments on “Tesla Betting Big on Bitcoin...”


  • avatar
    RangerM

    My understanding that most (all?) of Tesla’s profits are based on selling emissions credits to other automakers–not on car sales.

    Perhaps, that’s beginning to dry up, so Bitcoin is the next best chance. (is Tesla a car maker or currency speculator?)

    As for “Tesla investing”, I’d say Tesla’s shareholders have invested, since exchanging dollars for bitcoin isn’t like building a new factory, or hiring/training new workers.

    • 0 avatar
      Matt Posky

      I think you’re on the right track but I don’t believe free carbon money will instantly dry up for Tesla under the current leadership in the EU or US. That said, I think Musk sees what’s happening to the dollar while its being printed at a truly insane rate to “pay” for COVID bills and doesn’t want his companies totally tied to it. Ditto for the stock market, which is quickly becoming farcical.

      • 0 avatar
        Kendahl

        Or the stock market is discounting dollars.

        • 0 avatar
          Lorenzo

          Why would the market do that?

          Would it be that the dollar is backed by nothing more than the “full faith and credit” of the US?

          Would it be because the government spends a trillion dollars a year more than it collects in taxes?

          Would it be that the goverment has added three trillion more in Covid-19 relief with no additional revenue to pay for it?

          Would it be that the world’s appetite for Treasury securities is tapped out, and the Federal Reserve is buying them with money they just print?

          Would it be because there are members of Congress so ignorant of economics that they think they can just print more money to spend, and ‘inflation’ is just a word in the dictionary?

          The dollar was backed in gold until 1971. To buy what a dollar bought 49 years ago, you need $6.57 today. How much will you need in the future?

  • avatar
    Cicero

    I think that Musk sees cryptocurrencies as what will replace the dollar as the world’s standard medium of exchange. Given the rate at which dollars are being devalued (first under Trump, who did little to rein in spending, and now under Biden who is already mashing the accelerator into the floor with no concern for consequences) cryptos make sense. They are invulnerable to irresponsible government policy and manipulation.

    Separating exchange media from government banks will also give great benefits in financial confidentiality since records can’t be subpoenaed from a system that is entirely decentralized.

    Musk has always been a futurist so his move to support Bitcoin doesn’t really come as a surprise.

  • avatar
    SCE to AUX

    Best quote: “CEO Elon Musk has boosted various cryptocurrencies in the past by doing little more than saying their name.”

    If he mentioned that his dog’s food came from chewy.com, it might have the same effect for them.

  • avatar
    aja8888

    Please note that our government has the authority to declare Bitcoin (or any other crypto) as “unapproved” for use as legal tender in the U.S.

    As a matter of fact, Janet Yellen has already stated publicly that it’s the Treasury’s feeling (at the moment) that Bitcoin is used in illegal drug transactions. She appears to be setting the stage for bad things to happen to Bitcoin.

    • 0 avatar
      Cicero

      Our government also has the power to declare methamphetamine illegal. How’s that working out for them?

      A willing buyer and a willing seller are all you need.

    • 0 avatar
      Old_WRX

      aja8888,

      “Janet Yellen has already stated publicly that it’s the Treasury’s feeling (at the moment) that Bitcoin is used in illegal drug transactions. ”

      Gotta demonize it because it’s something that’s not under the government’s control. Can’t have that.:-)

  • avatar
    DenverMike

    It’s how the mafia (all), cartels, etc, conduct everyday business and bank their earnings. Elon just wants a piece of that. Smart.

    Especially if you’re buying outright. Pay with US cash currency, wire bank transfer, cashiers check, etc, (over $10K) and a giant bell goes off at the IRS, DEA, DOJ, ETC.

    When the $10K rule was enacted, you could buy 2 Mustang/Shelby GT500s. Why isn’t it adjusted for inflation?

  • avatar
    28-Cars-Later

    TSLA as a Bitcoin hedge… brilliant. MARA recently did the same with its surprise offering (though MARA is a BTC miner so it made a little more sense).

  • avatar
    gtem

    Popping in to check on Mr Healey fearlessly taking TTAC further and further into irrelevancy…

  • avatar
    el scotto

    Oh Lordy, is this what I have to look forward to? Get older, wake up at 3:30 AM to relieve my bladder, can’t go back to sleep, watch some NEWSMAX maybe some RT, drift over to Fox news. Wake up in my Lazy-e-boy with drool on my chin and being deeply afraid of anyone who doesn’t look or think like me. Hopefully the bottle blonde with the big hooters will be on Fox news. Maybe Roger Ailes had her and the other bottle blonde with even bigger hooters wrestle as he watched. Eat my oatmeal, drink my prune juice. Now it’s after lunch and I’ve ate enough cilium to start a farm and can’t go poop. I know what I’ll do! I’ll go on a car site and push my wing-nut conspiracy ideas.

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